Low cost and high quality integrated care: what can we learn from Japan?

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While changing demographics are putting considerable pressures on health and care systems in all Western countries, nowhere is it more acute than in Japan. A baby girl born today in Japan can expect to live to 86 and a baby boy to 79. By 2030, almost one in three people will be 65 or older.

Meeting the needs of an ageing population, against a backdrop of a diminishing total population, presents an enormous challenge for its Government. Yet Japan manages to provide universal health care coverage for its population (albeit with some co-payments) while spending around 8.5 per cent of GDP – lower than the UK, Germany, New Zealand and a whole host of other OECD countries.

Just how is Japan managing to do it? To explore this question (amongst others) the Nuffield Trust organised a study visit to Japan with the generous support of the Great Britain Sasakawa Foundation.

Part of the answer to Japan's relatively low expenditure lies in its tight grip on costs. It operates a fee for service system but, instead of restricting access, it uses the fee schedule – which is revised every two years – to keep prices under control.

Another key part of the answer lies in Japan's long term care insurance system (LTCI). Established in 2000, LTCI was designed to socialise the care of older people, shifting responsibility away from family and into the public domain.

In so doing, the scheme sought to lift the burden of care from families (particularly women), enabling them to enter the workforce, and to relieve pressure on the health system.

Introduction of the scheme entailed significant cultural and systemic change and was not without controversy. Historically, there was stigma attached to putting your elderly parents in a care home yet there was no stigma attached to admitting them to hospital as it was seen to be a 'medical' issue.

Lengths of stay grew and the number of institutional beds used for long-term care expanded rapidly. The trend towards older people living alone was also putting increasing pressure on health services.

Twelve years on, the scheme is embedded, well-established and widely considered a success. As such, it provides an interesting model for us as we grapple with the thorny issue of social care funding.

Part insurance-based and part tax-funded, the scheme operates alongside the existing health system, which is similarly part insurance-based and part tax funded. When people turn 40, they are required to start contributing to LTCI. Contributions vary according to locality but are typically around £30-40 per month.

Interestingly, debates at the time of its introduction focused on the possible erosion of traditional family values, and less on the extra financial burden on top of existing compulsory health insurance premia.

On turning 65, people become entitled to wide-ranging social care support, from home-based help with cooking and dressing to residential respite, intermediate and permanent care. Unlike our narrow definition of 'social care', long-term care in Japan includes some nursing and medical care for long-term conditions.

An individual's needs are assessed and they are assigned to a 'care level' which determines their entitlement. Individuals are required to pay some co-payments and 'hotel costs' for residential services (means-tested). The oil in the machine is the care manager who holds the budget and puts together a package of care.

Long-term care services have developed to wrap around mainstream health services. A competitive market of provision has emerged and many thousands of providers offer services. Many established hospitals have branched out into social care provision, extending their services to include home-based support and residential homes for those with dementia.

Of course, it's not perfect and growing financial pressures are giving rise to debates about eligibility and access. Before advocating for such a scheme to be introduced here, we must consider the context.

The Japanese scheme was introduced at a time of relative financial and political stability and in a very different cultural setting. In addition, the very limited system of provider regulation and quality assessment are elements that few here would find acceptable.

However, as the debate rages in England about how we might tackle the same issues, Japan offers one example of how wide-ranging reform can be achieved.

And, with 12 years of experience under their belts, we have the luxury of being able to observe and learn about what works and what doesn't and just how a parallel system of care can work and take the pressure off an overloaded health service.